NRIs buying health cover for parents? Real challenge begins at claim time

95% Claims Settled, But NRIs Still Struggle Managing Parents' Health Insurance

Senior health insurance in India has expanded significantly in recent years, with wider coverage for pre-existing conditions and more flexible underwriting for older applicants. On paper, this makes it easier for Non-Resident Indians (NRIs) to financially protect ageing parents back home.

 

But when a medical emergency strikes, many families discover a critical gap: owning a policy is easy — managing a claim from overseas is not.

 

According to the latest disclosures by Insurance Regulatory and Development Authority of India (IRDAI), insurers settled over 3 crore health claims in FY25, with several reporting claim settlement ratios above 95%. While this signals a strong and reliable system overall, it doesn’t reflect what families experience in real time during hospitalisation.

 

The real issue: Managing a hospital claim from thousands of miles away

 

For NRIs, the challenge is not access to insurance — it is execution under pressure.

 

When an elderly parent is hospitalised, especially in emergencies, families abroad must coordinate:

 

• Hospital insurance desk communication
• Pre-authorisation approvals
• Medical history clarifications
• Billing and discharge documentation
• Reimbursement follow-ups (if not cashless)

 

This entire process often unfolds across time zones, stress, and incomplete information.

 

Business Standard spoke to Prashanth Reddy, Founder &  MD, Anvayaa, an IRDA-licensed corporate agent working with senior families to understand how most NRI families structure health cover — and what they miss.

 

Most NRI families focus primarily on adequacy of sum insured and pre-existing disease coverage. A common structure is a ₹5–10 lakh senior citizen base policy combined with a super top-up to manage higher hospitalisation probability while keeping premiums manageable. Some opt for comprehensive plans with higher base cover if parents have chronic conditions, said Reddy.

 

What is often under-planned is execution readiness — nominee clarity, registered mobile/email access, network hospital mapping, and TPA coordination. 

Example: A US-based son purchases a ₹20 lakh cover for his father with diabetes but does not pre-identify network hospitals. During emergency admission, the nearest hospital is non-network, converting the claim into reimbursement and increasing coordination burden.

 

Common gaps include:

 

• No clarity on nominee or point of contact
• Parents not comfortable handling insurer queries
• No pre-identified network hospitals
• Lack of TPA (third-party administrator) coordination

 

A ₹20 lakh policy may look sufficient on paper. But if the nearest hospital isn’t in the insurer’s network, the claim shifts to reimbursement — increasing paperwork, delays, and stress.

 

Where remote claim management most commonly breaks down:

"Breakdowns usually occur at the hospital–insurer interface rather than at the underwriting stage. The three most common friction points are pre-authorisation delays, documentation mismatches, and communication gaps when insurers require medical history clarification. Time-zone differences often compound these issues," said Reddy. 

 

Example: An elderly mother admitted for pneumonia in Hyderabad requires insurer clarification on prior respiratory history. The son in California responds several hours later due to time difference, delaying approval and causing anxiety at the billing desk. While claims are often eventually settled, the stress arises during the live event — especially when elderly parents are not comfortable handling insurer queries independently. The system functions, but not always seamlessly for cross-border families.

 

 Why high claim settlement ratios do not automatically translate into seamless experience

 

"Claim settlement ratios reflect aggregate outcomes — not process quality. A 95%+ ratio indicates that most claims are ultimately paid, but it does not capture turnaround variability, partial deductions, or escalation cycles before closure. For elderly policyholders with recurring hospitalisations, predictability and coordination clarity matter as much as settlement rates," said Reddy.

 

Example: A cardiac claim is settled at 92% value within 12 days. Statistically successful. However, the family had to escalate twice over room-rent sub-limits and non-payable consumables before discharge. Settlement ratios measure solvency and compliance. They do not measure friction intensity during hospitalisation — which is where diaspora families experience strain most acutely.

 

Are differentiated servicing models are emerging for diaspora households?

 

Yes, primarily at the coordination layer rather than product design. Some ecosystems now integrate care managers who liaise directly with hospital insurance desks, TPAs, and insurers during live claims, explained Reddy. 

 

The differentiation lies in process orchestration — not underwriting terms.

 

Example: A Gulf-based NRI’s father is admitted for a cardiac episode. A local care coordinator verifies network status, tracks pre-authorisation, manages billing documentation, and updates the family abroad in real time. In contrast, families managing independently often rely on hospital front desks and call centres, escalating only after discharge.

 

Hence, the biggest evolution in this space is not in policy design — but in service infrastructure.

 

Some providers are now introducing care coordinators who:

 

• Liaise with hospitals and insurers
• Track pre-authorisation in real time
• Handle documentation
• Update families abroad

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What this means for you

 

If you’re an NRI planning health cover for your parents in India, here’s the real takeaway:

 

Insurance is no longer just about coverage — it’s about coordination.

 

Before buying or renewing a policy, ensure:

 

Network hospitals are identified in advance

Parents or a local contact can handle basic processes

Communication channels (mobile/email) are updated